Correlation Between Changchun Faway and China Life
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By analyzing existing cross correlation between Changchun Faway Automobile and China Life Insurance, you can compare the effects of market volatilities on Changchun Faway and China Life and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Changchun Faway with a short position of China Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changchun Faway and China Life.
Diversification Opportunities for Changchun Faway and China Life
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Changchun and China is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Changchun Faway Automobile and China Life Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Life Insurance and Changchun Faway is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Changchun Faway Automobile are associated (or correlated) with China Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Life Insurance has no effect on the direction of Changchun Faway i.e., Changchun Faway and China Life go up and down completely randomly.
Pair Corralation between Changchun Faway and China Life
Assuming the 90 days trading horizon Changchun Faway Automobile is expected to under-perform the China Life. But the stock apears to be less risky and, when comparing its historical volatility, Changchun Faway Automobile is 1.29 times less risky than China Life. The stock trades about -0.15 of its potential returns per unit of risk. The China Life Insurance is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 4,431 in China Life Insurance on September 20, 2024 and sell it today you would lose (267.00) from holding China Life Insurance or give up 6.03% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Changchun Faway Automobile vs. China Life Insurance
Performance |
Timeline |
Changchun Faway Auto |
China Life Insurance |
Changchun Faway and China Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Changchun Faway and China Life
The main advantage of trading using opposite Changchun Faway and China Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changchun Faway position performs unexpectedly, China Life can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in China Life will offset losses from the drop in China Life's long position.Changchun Faway vs. Innovative Medical Management | Changchun Faway vs. Beijing Kaiwen Education | Changchun Faway vs. CSSC Offshore Marine | Changchun Faway vs. Chengdu Spaceon Electronics |
China Life vs. BYD Co Ltd | China Life vs. China Mobile Limited | China Life vs. Agricultural Bank of | China Life vs. Industrial and Commercial |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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